Labor Claims a Victory After Walmart Investors Pull Out

As Walmart continues to dismiss a mounting labor movement in its stores as marginal and baseless, some large Walmart investors don't appear convinced. In one of the biggest victories yet for labor activists targeting Walmart, two large European pension funds have announced that they would no longer invest in the world's largest retailer.

Dutch pension managers PGGM and Mn Services declared in quick succession this week that they would divest from Walmart, claiming that the company does not treat its employees in accordance with international standards of freedom of association, and has failed to respond to their concerns.

It was real progress that "people are challenging this company to be different," said Dan Schlademan, the director of Making Change at Walmart, the union-backed campaign seeking to improve working conditions at the retailer, adding the companies are doing "what the board of directors should be doing: calling this company out."

For five years, PGGM, Mn Services and other European investors have tried to pressure Walmart to adopt the standards of the International Labour Organization. In a media release Monday, PGGM described Walmart's efforts to block workers from unionizing as "contrary to fundamental principles and rights at work" and "to the codes Walmart has compiled for its own suppliers."

Last year, the Netherlands' largest pension fund ABP also divested from Walmart for failing to comply with the United Nations' Global Compact, which outlines values related to labor, human rights, corruption, and the environment. In 2006, Norway's public pension fund sold all its Walmart shares, citing "serious/systematic violations of human rights and labor rights."

"We were very concerned that there wasn't sufficient oversight from the board," says Saskia van den Dool, a senior adviser for responsible investment at PGGM, which held 2.76 million shares of Walmart as of March 31, according to Reuters. "It left Walmart operating on the edges of the law."

"The final straw"
Walmart is famously hostile to unions, reportedly flying in teams of union-busters to stores at just a hint of union activity. This May, Walmart posted a job listing online for a director of Labor Relations, tasked with "assess[ing] vulnerability to union messaging in market," and "support[ing] continued union-free workplace ..."

When the company recently urged Walmart to again accept international standards, "they basically said this is not something we are going to consider," Van den Dool said. "This was basically the final straw that broke the camel's back."

Walmart made a similar point to Nm Services, stating that ILO standards applied to countries, not companies. "That is correct," says Kris Douma, head of responsible investment at the firm. "But we only want to invest in companies with those standards."

An unfortunate ending
OUR Walmart, the group behind the Making Change campaign, claims it is not seeking to unionize the retailer, but is pushing to improve hours, pay and benefits for its workers. Many of Walmart's 1.5 million employees earn just above the minimum wage, and rely on food stamps and other government programs to get by. Labor activists also accuse Walmart of retaliating against workers who seek to organize. (One of the group's protests, in L.A. last June, is pictured above.) According to OUR Walmart, 11 workers involved in the movement were fired last month alone.

But Schlademan isn't running a victory lap. "We sometimes wish that rather than pulling out they would use that voice to challenge their companies," he added about investors selling their shares. "But we understand that some of these companies have principles."

PGGM emphasized the many attempts they'd made to reach an agreement with Walmart before severing ties. "It's unfortunate that such a thing is even necessary," explained van den Dool. "It's not an objective for us to exclude a company. It's a conclusion after many attempts to engage in a constructive dialogue."